Industry group: Obama should help lower gas prices

President Barack Obama could lower gas prices by opening up more federal land and offshore areas for oil drilling, American Petroleum Institute President Jack Gerard said Tuesday.

Gerard, on a conference call with reporters, argued that Obama is misguided in saying “there’s no silver bullet” to combat high world oil prices or rising prices at the pump.

“We strongly disagree, and so do most Americans,” said Gerard, who heads the industry organization.

He cited a $16-per-barrel drop in oil prices in 2008 after after President George W. Bush announced he would lift a moratorium on offshore drilling.

“That was a signal to the marketplace: Help is on the way,” Gerard said.

Gerard said the prospect of further gains in domestic oil supplies would change world expectations and put downward pressure on world market for crude oil, which accounts for three-fourths the prices of gasoline costs.

When asked why oil prices have remained high despite increases in domestic production, Gerard acknowledged that the price of crude is set on a global basis and that several factors affect the price.

“So you have to look at some of the other variables,” he said.

Still, he insisted that Obama should take more action to push production even higher.

He said that more than 85 percent of offshore areas are off-limits for drilling, and he said the Obama administration should provide more access to domestic supplies of oil and gas, approve the Keystone XL pipeline, reduce regulations on the energy industry and refrain from targeting oil companies for more taxes.

“If the administration will do these things, our companies will produce more American oil and gas … and help drive down prices,” Gerard said. “That is what our country needs. It’s what our people want us to do.”

Gerard gave a cautious response on whether the planned construction of the domestic stretch of the Keystone XL pipeline could lower global crude oil prices.

“It will be helpful,” he said.

Gerard, however, criticized the administration’s decision to reject a permit for the border-crossing section of the pipeline. He said the entire Keystone XL pipeline would have helped transport crude oil from Canada, North Dakota and Montana fields to refineries on the Gulf Coast.

62 Responses

What are funny are the arguments over Obama opening federal lands to drill. The left views this as Obama making compromises to big oil while exposing the environment to risky practices, while the right views this as a step in the right direction towards energy independence (although understanding that they are likely empty promises or lengthy battles). Some from the left (Kurt and Lamer above) argue that federal land is available, yet O&G companies aren’t drilling on it for some reason. The reason unfortunately is what the majority of the general public does not understand regarding the federal land issue. You see Obama is smart in the fact that he can snowball all of his followers by giving speeches about opening federal land. The leftist commenters (generally naive about what really is going on in industry) scream bloody murder that their savior is doing what he can by opening federal land; all the while, through his federal regulatory agencies, the process to actually permit wells to drill has slowed to a crawl.

It’s a great political strategy…sing from roof tops that you are doing something helpful, while quietly killing progress as permits are swept under the bureaucratic rug.

There is an interesting article on Yahoo (http://old.news.yahoo.com/s/ap/20120321/ap_on_re_us/us_drill_now_fact_check) that points out that increasing US drilling will not necessarily decrease the price we pay for gasoline. That’s because there are plenty of other countries that are also willing to pay for gasoline and oil, so the US is no longer the dominant market driver.

Increasing the number of areas available to drill will provide more tax revenues and will reduce our dependence on foreign oil, so it would still be a good thing. But it won’t cut the price you pay at the pump.

Obama bin Biden
March 20, 2012, 11:58 AM
How dare the API president argue with a community organizer.
———————–

How dare a professional lobbyist who has never worked in the oil and gas industry argue with the President of the United States.
(Gerard has never held a position in the industry besides this lobbying group. He is paid large sums of money to shill for oil and gas companies.)

Speculation and trading are in part based on psychology. If you have a President that has been closing off Federal lands for leasing and making all sorts of noise about making the oil companies business expenses non-deductible, that stopped a major pipeline project (I guess 3 years wasn’t enough time to study the ramifications?), what message does that send? To me, and probably to everyone else who is paying attention, it says “We are going to try to hurt your business in every way we can”. That’s a powerful message that tells the market that supplies will become as short as those in the government can make them. Combine this with the uncertainty in the Strait of Hormuz, and people buying oil a few months out are going to panic-buy, just to cover their bases. And up, up, up goes the price. If Obama has any advisers with a few working brain cells, he’s already been told this and is OK with it. It DOES meet his stated and unstated objectives of driving up the price of energy to force conservation.

hey tsujones,
that is the same cr@p the Saudi oil minister said when oil was at $145/barrel. What Obama should have done was to do something 3+ years ago – I mean something other than his green energy fiascos.

I get amused at the bickering over this minor rise in gasoline prices. Wait until Israel strikes the nuclear facilities in Iran and Iran launches missles and speed boats into the Strait of Hormuz. Wait and see what gasoline prices do then.

If everybody would get off their Couch Potatoe heinies,and vote in
the coming presidential election, The Messiah would be gone and
so would the Train Wreck this country has become.
What part of “Get out and vote” do you not understand???

Fine, open up, but with safety, something the industry hates to consider doing.

Lets also raise royalty rates to those equal to the private sector. Why should citizens get smaller rates for oil taken under the public’s land? And the subsidies, is this industry so poor that they need subsidies also.

Talk about an industry ripping off the American public! Of course they pay their dues to the politicians to do so. Since so much of this money, going to political contributions, really comes from disadvantageous deals with our government, the citizens, rather than the companies should get the credit!

“Industry group: Obama should help lower gas prices”
==========================================================================
but then, this would be contrary to his comprehensive energy policy to destroy the American economy.

Dan McGraw, Obama’s largest contribution to the elevated price was the devaluation of the US dollar by monetizing nearly 20% of the federal debt. So yes, he is able to influence prices in a direct and decided manner.

Ed, The US produces roughly 38% of our daily consumption, so just how then are we a net exporter? What we actually export are refined products, and they mostly go to places without local refineries like most of the Caribbean islands.

And Lamer, the API doesn’t drill anything, just as the ADA doesn’t treat cavities in teeth, or the AMA doesn’t treat the flu.

Ohhhhh , Wait just one minute! Are you telling us that our , errrr, your president lied to all of us ? That can’t be. He would never, ever, lie to his people . Would He ? Of course he would ,that’s all he does.

The video points out the liberal bias in reporting Chron included). pelosi and obama were quick to blame Bush for high gas prices in 2006-2007 when the avg price of gas was about 2.30/gal. Now, obama jokes about the high price of gas and nobody is blaming him. I wonder why.

I will be the first to admit that the price of oil is primarily a function of supply/demand. That being said, if we increase the supply (or the prospect of supply) it would have a downward pressure on price.
So why don’t we increase the areas available for drilling, and increase the infrastructure for delivery of the oil from available sources?

I know that it will take some time before any drilling produces oil for the marketplace, but every day we delay means another day before the oil does become available. If it takes 2 years to bring oil to market, had we drilled 2 years ago it would be coming online now. How long are we going to wait to bring tomorrow’s oil online?

Obama will do something about gas prices, after he lets his Saudi buddies make as much as they can over then the summer, the Obama saves the day right before the election, and as usual the people are too stupid to see this.

Boy, are the looneys out for this one. Obama lower prices? Won’t happen. The Volt will go away. The Libs heads will explode and the EPA won’t have anything to do. High gas prices Obama promised. He did it and he’s happy.

One thing Obama could do is try to create more incentives for alternative fuels for our biggest gasoline consumers.
Some kind of federal sponsored X-Prize kinda thing for people to figure out how to convert our 18-wheel trucks and trains into solar/electric/propane/hydrogen/something or other fueled vehicles.
If Kennedy can declare that we’re going to go to the moon, and the US spends a fortune to figure out how to do the impossible, then why can’t we do it again to get ourselves off gasoline?

if oil prices jump because of what iran might do, and it seems the things they(media, politicians) say that might happen never do. doesn’t it make sense for obama to say that he is going to open up the reserves? how would the speculators know if he did or not.

We should make no effort to lower gasoline prices. High gasoline prices tend to make Americans conserve energy and sadly that is a fact. High gasoline prices will force Americans to:
1. Build an efficient mass transit bus and rail system like all the other countries of the world.
2.Build more efficient motor vehicles.
3.Build smaller motor vehicles.
4.Use alternative fuels for our motor vehicles like natural gas, hydrogen and electricity.
5.Pass an energy policy that will include wind power, solar energy, nuclear power and more use of natural gas.

So please we need to keep the gasoline prices high to accomplish these necessary missions.

The current rise in oil prices has everything to do with the iranians sbre rattling. Every time they make a threat all the futures traders march in lockstep towards higher prices. The iranians are laughing all the way to the bank.

The API has a very active political arm which supported the GOP to the tune of 77%. Its most active supporter was Koch Industries who gave 90% of their contributions to Republicans. As such, I am amazed the group opposes anything the President does. They want lower taxes, fewer regulations and more drilling areas. Hell, who doesn’t support that. The Gulf Coast needs more BP and Exxon type spills to create additional cleanup jobs for the economy.

Sure, the President has influence on the price of a world commodity. I’m sure he can impact the price of something whose demand decreases daily. I just know he is pocketing all of those oil company profits, and calling up each station to tell them what to sell gas for each day. Notice how the price of oil futures immediately impacts the price you pay for the refined product, that may have spent several months from actual purchase to actually being refined, stored, then shipped? Anyone who falls for the argument that the President sets the price of oil needs to have their head examined. Looks like GWB set it too high!

Of course Mr. Jack Gerard would say that he is part of the problem. We can’t expect President Obama to a problem that has been broken for at least 30 years. We need to stop giving oil companies taxes brakes. The price of gas in Iraq is $2.10 a gallon. In the US it is $375 at lest. What wrong with this? Stop the tax brakes……

shortage…lol there is none. Big oil just keeps closing refineries and keeping supplies low so prices stay high just like they like them. If we use less they sell it to someone else. big oil has us coming and going. Time for the government to manage there own refinery or two. Sounds crazy but it is truly the only way to keep Big oil from controlling the entire game. Also time is long over do to cut off the tax breaks for big oil as well. After all Big oil is certainly not cutting us any breaks.

Of course our Dear Leader has the power to reduce the price of gasoline.

One only has to examine the lesson being taught by the dear leaders of the PRC. China has scarcely any petroleum production of note so it is now virtually dependent on imports from the Middle East.

In this connection, the Chicoms do possess relatively large deposits of low grade coal which they produce without regard to lives lost and limbs broken. This suggests they may also have enormous quantities of associated shale but lack the technology to produce it.

Hence, the Chicoms are doing as much as they can as rapidly as they can to invest in U.S. firms with fracking expertise and posting smart people to the U.S. for field experience.

(Pollution has not been and never will be a hindrance to the use of fracking in the PRC since it is such an obvious national security game changer. They shoot greenies and NGO types who get in the way of their drive to World Power unless the interests are those of the foreign devils, e.g. Phillips Pete.)

As a ready tool to sustain economic growth and provide another export platform the Chicom policy included subsidies for gasoline. Predictably the auto industry has shown enormous growth along with highway infrastructure and traffic gridlock that makes Houston’s daily commute a drive in the country.

Today the Chicoms cut their gasoline subsidy and guess what? The world price of crude was weakened as a result.

Obama should end all taxes on gasoline etc. and as the price falls the greater demand for crude will tend to strengthen the world price and so increase costs in China. Should help Obama between now and November. What likely comes thereafter is a somewhat different story.

3/20/2012 Executives at Chevron Corp and its contracted drilling firm Transocean Ltd. will face criminal charges this week in Brazil stemming from a leak from the offshore Frade field last November…Up to 3,000 barrels of oil leaked from the ocean floor at Chevron’s Frade field. A dozen Chevron employees and five Transocean workers will be charged with environmental crimes that, if they are convicted, could carry prison terms of up to five years.

Deepwater Horizon spilled almost 5 million barrels into the GoM. If they did that in Brazil they’d be under the jail.

March 31, 2010
President Obama’s proposes to open vast expanses of American coastlines to oil and natural gas drilling . The plan, which Mr. Obama said would balance the need to produce more domestic energy while protecting natural resources, would allow drilling along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska. It would end a longstanding moratorium on exploration from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean.

Mike, we’ve talked about this for months on Fuel Fix. Analysts have said presidents and lawmakers don’t have much sway of gasoline prices. The reason is crude oil prices are traded globally and politicians can only have a minimal impact on those prices.

“Obama wants to punish the south and maintain his socialist agenda for a government hostile take over. Thats why he wants to suspend the up coming elections so he can stay in office illegally. The only difference between Obama and Hitler is Obama has not killed anyone yet and i do stress the word YET !!!”

LMAO… wow. Someone has his tin foil hat on a little tight this afternoon.

Shame on you for presenting facts and using the APIs own propaganda to support them. You obviously didn’t pay attention to the article. If you re-read it you will notice that Mr. Gerard simply wants an “announcement” or “signal”. There may be no “silver bullet”, but that doesn’t mean that Mr. Obama shouldn’t at least try to give the illusion that there is one. After all, as Mr. Gerard pointed out, it worked for Mr. Bush.

according to obama and the rest of the liberal dems bush had control over oil and gas prices and could lower them if he wanted to. now that their little boy obama has been pres. for over 3 years obama and the liberal dems claim that obama in no way can control oil and gas prices. that seems kind of strange to me,but seems to be perfectly logical to the liberal dems.

Richard, exactly. This pipeline garbage is getting on my last nerve. Yea the oil companies will send oil to the gulf coast to ship to China to fatten their pockets. that project has absolutely no impact on any US oil prices. I wish these oil executives and mouthpiece groups would stop making these misleading statements. Just stop already. Nothing is stopping anyone from drilling in the gulf but the oil companies whining about the increased scrutiny. Shut the H up and go create jobs and have your people do their work to get the work. At this point every oil company 2 years later should be firing any compliance person that can’t make drilling in the gulf happen period. Everytime the API mouthpiece opens his pie hole some misleading statement comes out of his mouth. Obama had opened up a good portion of the eastern seaboard to exploration until BPs action messed it up for everybody. He’s trying to help you clowns make money stop sniping everytime you don’t get everything you want.

API
Crude oil, natural gas and other petroleum products are global commodities. As such, their prices are determined by worldwide supply-and-demand factors. The prices consumers pay are the result of the interaction of thousands of buyers and sellers in both the physical commodity and futures markets. These buyers and sellers bring their own knowledge and expectations about demand for and supply of crude oil, natural gas and petroleum products. They also take into consideration factors that may affect these products in the future such as production and supply, the state of the economy, the global political and trade situation, and war or the threat of war.
…
It is important to understand that long lead times are often required for new discoveries, during which the companies pursuing such projects will spend as much as hundreds of millions of dollars in risk capital. The significant oil and natural gas discoveries being announced today often result from investments begun by energy companies as far back as ten years ago.

Saudi Oil Minister: There’s No Shortage of Supply
Top oil exporter Saudi Arabia sought to soothe fears about high oil prices, saying on Tuesday world supplies were well in excess of demand and that $125-a-barrel crude prices were not justified given the anemic state of the world economy. Saudi Oil Minister Ali al-Naimi said the kingdom had satisfied all of its customers’ requests for oil and stood ready to raise output to full capacity of 12.5 million barrels per day (bpd), if needed. “I want to assure you that there is no shortage of supply in the market,” Naimi told reporters at a press briefing in Doha, Qatar. “We are ready and willing to put more oil on the market, but you need a buyer.”

Obama wants to punish the south and maintain his socialist agenda for a government hostile take over. Thats why he wants to suspend the up coming elections so he can stay in office illegally. The only difference between Obama and Hitler is Obama has not killed anyone yet and i do stress the word YET !!!

Duhhhh… you think the API wants a Democrat President (which they have flourished under) to be back in office?? This is inadvertent GOPT campaigning. In 2008, every source Fox News could find, told the public “Politicians have NO control of rising gas and oil prices”. Of course that was when McCain was running, and far less were drilling than there are today. Call me not surprised at the API’s assertion.

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